At Stellantis, the “Tavares method” is called into question and the boss’s succession is being prepared

“We quickly go from hero to zero. » This is one of Carlos Tavares’ favorite phrases, to avoid any triumphalism. Despite this caution, the CEO of Stellantis allowed himself to be intoxicated by results that were as exceptional as they were temporary. In 2023, the general manufacturer, born from the merger between PSA and Fiat Chrysler, has reached the same margins as Mercedes or BMW. Never seen before. In March, the share price was at its highest, at 27.34 euros, celebrating ten years of the engineer at the head of the group. Three months later, despite worrying signs in the United States, it continued to promise profitability on its sales “double digits”.

Weary! Sunday, September 29, the board of directors met urgently and, in a “ funeral atmosphere », According to one of the administrators, Carlos Tavares significantly revised the results downwards. From 14% in 2023, the operating margin returns to between 5.5% and 7% in 2024, i.e. zero profitability in the second half. The stock fell to 13 euros. The Tavares method – drastic reduction in costs and breakeven point, while selling its cars at ever higher prices – clashes with the reality of the market. Buyers are no longer following, particularly in the United States, where the group made half of its profits. Even before this announcement, the board of directors launched the recruitment process for Mr. Tavares’ successor, whose term ends in January 2026.

In recent months, the group has suffered a series of bad news. First there was the Takata airbag crisis: after several fatal accidents, for the first time, an automobile recall campaign was accompanied by a stop drivea recommendation to no longer drive the vehicle. It took several months for the manufacturer to get into battle shape. Could he have anticipated the problem better without this obsession with always reducing costs? This is what Citroën C3 and C4 drivers would like to know who are filing a complaint against Stellantis, joining the anger of Peugeot owners equipped with faulty PureTech engines.

The American crisis quickly took over: in June, Carlos Tavares recognized the failure of the group’s marketing strategy, which maintained high prices when its competitors lowered theirs. The market share of American brands (Chrysler, Jeep, Ram and Dodge) has declined significantly. In a letter addressed to Carlos Tavares, cited by the New York TimesKevin Farris, the president of Stellantis dealers, very angry, denounces a « short-term and reckless decision-making process to ensure record profits in 2023 »with « devastating consequences, yet absolutely predictable”. They are still waiting for a replacement for Jeep’s best-selling Cherokee and only have to offer their customers more expensive models. The waltz of the group’s leaders in the United States leaves them without an interlocutor.

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